Editorial: Glass Half-Empty.(Editorial)

Those of us who held out hope for a soft landing a year or two ago underestimated the depth and severity of the housing market downturn. Those of us who thought the correction would be over relatively quickly also have been disappointed.

The most recent delinquency numbers from the Mortgage Bankers Association are a reminder that in much of the country, things have gotten worse in recent months. Not better. Every once in a while we see a glimmer of hope, such as last month's dip in the inventory of existing homes for sale, but weakness in the spring homebuying season reminds us that all is not well. The MBA's delinquency numbers for the first quarter held few such glimmers of hope, anyway. The overall delinquency rate, foreclosure starts and the inventory of loans in foreclosure all stand at record highs. All told, 8.82% of home loans outstanding were at least 30 days past due or at some more serious stage of delinquency or in foreclosure. With the overall delinquency and default rate approaching double digits, the mortgage servicing industry is likely to feel some pain for the foreseeable future.